R Street applauds successful efforts to shrink Fla Citizens
TALLAHASSEE, Fla. (Dec. 10, 2013) – The R Street Institute welcomed today’s news that Florida’s state-run Citizens Property Insurance Corp. has seen its policy count fall to just over 1 million, a drop of 31 percent since 2011.
According to data presented to the Florida Cabinet – which consists of the governor, chief financial officer, attorney general and agriculture commissioner – over the past 21 months, Citizens’ total exposure has decreased by 35 percent to $330 billion and its probable maximum loss from a 1-in-100 year storm has decreased by 26 percent to $16.15 billion.
“These latest figures are an encouraging sign that the steps taken by the Legislature in recent years to shrink Citizens is working,” R Street Florida Director Christian Cámara said. “Indeed, the successful ‘takeout’ efforts pursued by management at Citizens, as well as its successful shift to using more private reinsurance, also deserve credit.”
As its surplus has grown to $7.66 billion, Citizens has managed to reduce its reliance on the Florida Hurricane Catastrophe Fund to $4.48 billion from $6.91 billion in 2012. It now cedes $1.85 billion to private reinsurance markets, up from just over a half-billion in 2011. Most importantly, the layer that would be funded by post-storm hurricane taxes has also fallen dramatically, to $3.99 billion from $11.61 billion in 2011.
But Cámara also noted that more needs to be done, as Citizens continues to pose a great threat to Florida taxpayers and the state’s ability to recover quickly after a hurricane.
“The Legislature should continue exploring ways to eventually restore Citizens as the state’s true insurer of last resort to reduce or eliminate the likelihood of a taxpayer bailout following a bad hurricane season,” he added.
